Seven West Media shares flat as analysts eye weak ad bookings
Make us a preferred source
Make us a preferred source on Google
More news: Shares in Seven held steady at the open on Wednesday after the company reported a weak earnings result.
Analysts noted weak September and October advertising bookings, which were down 4.5%.
What they said: “The stock has been weak into the result, but we struggle to see any meaningful rebound based on today’s numbers, especially given the continued declines in Sept/Oct,” E&P Capital’s media analyst Entcho Raykovski told investors Wednesday morning.
UBS media analyst Lucy Huang has a sell rating on the stock. She said she expects further cost-cutting programs into next year.
“Overall, top-line was a slight miss to cons (but beat to us, as we were expecting softer total TV revenue share in 2H). Similarly, EBITDA and NPAT were materially weaker vs consensus as a result,” Huang wrote in a note on Wednesday.
“Early days, but current trading update for Sep/Oct bookings — 4% to 5% is tracking a touch softer vs our full-year run rate expectations. Cost guidance was in line with consensus, slightly below us, suggesting further cost reductions into next year.”
Seven West Media reports 33% earnings slide amid sustained advertising rout
The news: Seven West Media has reported a 33% full-year earnings slide to $187 million, and flagged ongoing cost-cutting into 2025, as an advertising rout continues to challenge the free-to-air television company.
The numbers: Seven raked in group revenue of $1.4 billion, down 5% on the 2023 fiscal year. Earnings before interest, taxes, depreciation and amortisation was $187 million, down 33% on 2023.
The Kerry Stokes-controlled media group reported statutory net profit after tax of $45 million, down 69% on the previous year, with underlying net profit after tax excluding significant items of $78 million, down 46%.
The company said it will not renew its buyback program into the 2025 fiscal year, and no dividend will be paid for the 2024 financial year.
What they said: “FY24 is a tough result for SWM in a challenging market. While growth in audience and revenue share partially offset the impact of the weak market, cost growth of 2% contributed to our EBITDA decline of 33%, reflecting the operating leverage in our business,” Seven chief Jeff Howard said in a statement.
“Following delivery of $25 million of our cost out initiatives in 2H, we have taken decisive action to materially increase the program into FY25 to give SWM a platform to drive improved performance.
“The continued weak economic environment contributed to an 8.2% decline in the total TV advertising market on FY23. SWM was able to partially offset this decline by increasing our revenue share of the total TV market to 40.2%. This share growth was built on the targeted content investments made. The group was able to partially offset these investments through the implementation of $25 million of cost reductions in the 2H under the program announced at the FY23 AGM.”
The source: ASX announcement
